Recommendations to Recommendations to

Support Michigan’s Education SystemSupport Michigan’s Education System

Revenues, Reforms, and Restructuring

Recommendations to Recommendations to

Support Michigan’s Education SystemSupport Michigan’s Education System

Revenues, Reforms, and Restructuring

State Board of Education, April 13, 2010State Board of Education, April 13, 2010

The Case for Education

• Path to individual opportunity: - $28K with H.S Degree; $48K with four year degree- $ Million over lifetime

• Path to state economic prosperity:- Best educated states have highest incomes- Michigan is 34th in education attainment- Michigan is now 37th in per capita income

• Economists across spectrum agree - Michigan budget priorities and dysfunctional fiscal decision-making are killing long-term economic prospects

Principles to Guide Revenues, Reforms and Restructuring

• Equitable

• Predictable and Durable

• Holistic

• Shared Sacrifice

• 21st Century

• Balanced Approach

A Clean Sheet – First Define Education System We Need to Compete – Then Decide What Resources

Needed to Deliver

A continuum of basic education services

• Pre-K and Kindergarten

• K-12 support level to deliver quality

• Learning infrastructure

• New level of post-secondary attainment for all

• Higher education valued as economy engine

Delivered through reformed, accountable-for-results structure

• Progress and graduate without remediation• School-based “foundation grant” with per

pupil “innovation” grant• Every child should have opportunity for early

college credit taking • In return for support, higher eds curb tuition, in

data system, dual enroll and credit acceptance• Synch up state school and budget cycles; no

pro-ration

Paying for the Education System Michigan Needs – Comprehensive Long Term Reform

• Get past budget either/or: spending cuts, regulatory relief, or more revenues

• Need to rearrange how a lot money is spent now• At scale to provide base level of education services Pre-K –

Higher Ed• And realize economic benefits (e.g. early childhood payoffs)• SBE recommends balanced, comprehensive, long-term

approach• Spending cuts that don’t undermine services; tax changes and

regulatory reforms

Key Education Base Elements –What do they cost?

• Pre – K $150-300

• K $10-20

• K-12 prior cuts $850 - $1

• School infrastructure $960

• Lt. Gov. Commission goal – 2yr.

Post-secondary $340

• Higher Education back to 50/50

tuition/state share and equal peer states $950

What Cost Savings and Reforms can rearrange dollars to support these priorities?

• Shared services or consolidation $300• Move to DC pension $200• “No remediation” system $25-50• Health benefits reform $500• Local taxpayers save on infrastructure $1 B• Taxpayers save on higher ed tuition $700• Reduce contract double – dipping $2-10• Fund equity treatment $25-50

What revenue changes could help?

• Extend sales tax to services - lower rate $700-$1B• Graduated income tax $500-$1B• Local units increase millage if share

goes to state $10-100• Tax private pensions $200-$500• Eliminate targeted tax credits $200-400

Recommendations

• SBE endorse: principles, key elements of needed education system, cost-savings and revenue elements that can be part of the solution

• SBE ask State Superintendent to facilitate bi-partisan stakeholder process to advance recommendations

• SBE recommend this year “50-50” fix approach:- to keep base level of K-12 funding/services, find half through service/employee cost cutting; half new revenues- fully fund Pre-K/K with half savings from schools, half new revenues- return to 50/50 tuition/state higher education support, provide higher ed financial aid

Bottom Line - the states where citizens are prospering most….

The Case for Education

They are the ones with the best educated people

The Case for Education

Can’t starve our learning institutions and research centers, and cut off financial access to them—when the rest of the country and world is trying to copy what we have

Case for Education